Kiefer v. City of Idaho Falls, 5350

• Citation: 289 P. 81,49 Idaho 458
• Decision Date: 06 June 1930
• Docket Number: 5350
• Court: United States State Supreme Court of Idaho
• Parties: HENRY W. KIEFER, J. MCGIBBON, W. S. SNYDER, WADE BROS., INC., a Corporation, ALVIN DENMAN, Receiver for the EAST IDAHO GAS COMPANY, a Corporation, W. A. ASHMENT, and W. H. WRIGHT & SONS COMPANY, a Corporation, Appellants, v. THE CITY OF IDAHO FALLS, a Municipal Corporation of the State of Idaho, BARZILLA W. CLARK, Mayor, and E. R. UNDERHILL, Clerk of Said City, Respondents

289 P. 81

49 Idaho 458

HENRY W. KIEFER, J. MCGIBBON, W. S. SNYDER, WADE BROS., INC., a Corporation, ALVIN DENMAN, Receiver for the EAST IDAHO GAS COMPANY, a Corporation, W. A. ASHMENT, and W. H. WRIGHT & SONS COMPANY, a Corporation, Appellants, v. THE CITY OF IDAHO FALLS, a Municipal Corporation of the State of Idaho, BARZILLA W. CLARK, Mayor, and E. R. UNDERHILL, Clerk of Said City, Respondents

No. 5350

Supreme Court of Idaho

June 6, 1930

ELECTRICITY-MUNICIPAL POWER PLANT-RATES-REASONABLENESS-WHO MAY COMPLAIN-PRESUMPTION-JURISDICTION OF COURT.

1. Since municipally owned utilities are not under jurisdiction of Public Utilities Commission, person affected thereby may sue in court to test reasonableness of rates (C. S., secs. 2371, 3971, as amended by Laws 1927, chap 195).

2. One can complain of rate of public utility only if affected thereby as electricity user or taxpayer.

3. Unless certain rates are discriminatory as against domestic lighting rate, making it bear unjust share of operating city's power plant, or insufficient to make plant self-sustaining, taxpayer cannot complain.

4. Rates fixed by municipality for electricity furnished by own plant are presumed reasonable.

5. Those attacking rates fixed by municipality for electricity furnished by its plant must show rates are discriminatory or unreasonable.

6. Mere difference in rates for electricity charged various customers of public utility does not establish unjustifiable discrimination.

7. Supreme court cannot substitute its judgment for city council's as to what rates for municipality's electricity are reasonable or best promote public interest unless substantial right is adversely affected.

8. While ordinarily rate should pay cost of production of electricity, there may be circumstances justifying less rate.

9. Schedule of rates of public utilities privately owned without explanation showing similar conditions, held of no value to establish that rate of municipally owned utility was discriminatory or unreasonable.

10. Courts cannot fix rate for electricity, but may only determine whether rate established is discriminatory or unreasonable.

11. Criterion for determining what rate for electricity is just and reasonable depends on circumstances of particular case.

12. Where rates for certain classes of electricity from municipal plant approximately equaled production cost, users thereof were not benefited at expense of other classes so as to make rates discriminatory or unreasonable (C. S., sec. 3971, as amended by Laws 1927, chap. 195).

APPEAL from the District Court of the Ninth Judicial District, for Bonneville County. Hon. B. S. Varian, Judge.

Action to enjoin enforcement of rate schedule. Judgment for defendants. Affirmed.

Judgment affirmed. Costs awarded to respondents.

Alvin Denman, for Appellants.

All charges, rates or revenues of municipally owned electric plants must be reasonable. (C. S. 3971; 4 McQuillin, 845; Civic League of St. Louis v. St. Louis Water Department, Pub. Util. Rep. 1917B, 576.)

Municipally owned electric plants are subject to the same rules and regulations under the Constitution and statutes for fixing reasonable rates as are applicable to private corporations. ( Milligan v. Miles City, 51 Mont. 374, 153 P. 276, L. R. A. 1916C, 395; 4 McQuillin, 858; Feil v. Coeur d' Alene, 23 Idaho 32, 53, 129 P. 643, 43 L. R. A., N. S., 1095; Eaton v. Weiser, 12 Idaho 544, 118 Am. St. 225, 86 P. 541.)

The requirement that rates must be uniform and equal to all alike forbids any difference in charge which is not based on difference of service, and requires the same charge for doing a like and contemporaneous service (e. g., supplying gas, light, power or heat) under the same or substantially similar circumstances or conditions. (Western Union Tel. Co. v. Call Pub. Co., 181 U.S. 92, 100, 103, 21 S.Ct. 561, 564, 45 L.Ed. 765; State Public Utilities Commission v. Chicago & W. T. Ry. Co., 275 Ill. 555, Ann. Cas. 1917C, 50, 114 N.E. 325, 328; Civic League of St. Louis v. St. Louis Water Dept., supra; 4 McQuillin, 844, 845, 847, 848, 854.)

All rates, charges or revenues of municipally owned electric plants must be based upon the service suppied proportionately. (C. S. 3971; Sess. Laws 1901, p. 140; 3 Spurr, 526; 4 McQuillin, 845, 847, 848, 854; Civic League of St. Louis v. St. Louis Water Dept., supra.)

Kenneth S. MacKenzie and George W. Edgington, for Respondents.

The demurrer to the complaint should have been sustained and the court is without jurisdiction of this action for the following reasons:

1. "The reasonableness of a rate charged by a public service corporation, for electric current supplied by it, cannot be raised by an individual user, so long as such rate does not exceed the maximum established by an ordinance enacted under express legislative authority." ( Homestead Co. v. Des Moines Electric Co., 226 F. 49.)

2. For practical reasons, courts ought not to entertain suits at the instance of individual consumers, to enjoin a public service corporation from placing in effect a schedule of rates which does not exceed the maximum fixed by the proper legislative body. (St. Paul Book Co. v. St. Paul Gaslight Co., 130 Minn. 71, Ann. Cas. 1916B, 286, 153 N.W. 262, L. R. A. 1918A, 384.)

Plaintiffs have no right to champion the rights of others without showing that their own rights are affected. (Brummitt v. Ogden Water Works, 33 Utah 289, 93 P. 828; Morris v. Municipal Gas Co., 121 La. 1016, 46 So. 1001; City of Oswego v. People's Gas & Electric Co., 116 Misc. 354, 190 N.Y.S. 39.)

The rates fixed in Ordinance No. 417 of the city of Idaho Falls are presumed to be reasonable. (4 McQuillin, 976, sec. 1888; Cedar Rapids Gaslight Co. v. Cedar Rapids, 144 Iowa 426, 138 Am. St. 299, 120 N.W. 966; San Diego Water Co. v. San Diego, 118 Cal. 556, 62 Am. St. 261, 50 P. 633, 38 L. R. A. 460.)

The burden of proving such rates unreasonable is upon the party assailing them. (Lake Forest Water Co. v. Lake Forest, 249 Ill. 382, 94 N.E. 517; Idaho Power Co. v. Thompson, 19 F.2d 547.)

The only grounds upon which the court will interfere with the legislative function of rate-making is that they impair constitutional rights, and interference will not be made unless on a showing that such rights have been invaded, and the proof in that regard must be clear and convincing. ( San Joaquin Light & Power Corp. v. Railroad Commission, 175 Cal. 74, 165 P. 16; Idaho Power Co. v. Thompson, supra.)

A. H. Wilkie, Amicus Curiae.

GIVENS, C. J. Budge, Lee and McNaughton, JJ., and Terrell, D. J., concur.

OPINION

GIVENS, C. J.

Appellants contest as discriminatory, unreasonable and inequitable the rates fixed by the city council for electricity supplied by the municipally owned hydroelectric light and power plant of the city of Idaho Falls. The trial court found that the rate for water heating and the discount allowed hospitals were discriminatory and the same therefore need not be further considered. The rates in dispute are for commercial lighting, commercial power and sign lighting, domestic lighting, domestic power, domestic combination, and irrigation power.

C. S., sec. 3971, as amended 1927 Sess. Laws, 262, requires rates of a municipal plant to be reasonable.

Respondents contend that the courts are without jurisdiction to pass upon the reasonableness of rates charged by a municipally owned light plant, and that the rates charged are reasonable and not discriminatory, and cite in support of the first point, Homestead Co. v. Des Moines Electric Co., 226 F. 49. This case was reversed in Homestead Co. v. Des Moines Electric Co., 248 F. 439, 160 C. C. A. 449, on the point that this issue was not involved therein; furthermore, that case did not concern rates of a municipal plant but only the authority of a municipality to fix maximum and minimum rates for a privately owned utility. The circuit court of appeals indicated that the action of the city council could be tested in the courts.

Cases cited in the note to this case in 12 A. L. R. 404, strongly suggest that courts do have jurisdiction to pass on the reasonableness of rates charged by municipally owned utilities. Most of the cases referred to by respondents, and many others cited, with regard to this point, hold that relief must first be sought from the regulatory body but that thereafter the courts may be appealed to.

An Ohio case referred to, Butler v. Karb, 96 Ohio St. 472, 117 N.E. 953, is based upon a statute (Ohio Gen. Codes, secs. 4311, 4313, 4314), which we do not have. (See C. S., sec. 3864, as amended 1921 Sess. Laws, chap. 25, p. 33.)

Springfield Gas Co. v. Springfield, 292 Ill. 236, 18 A. L. R. 929, 126 N.E. 739, 746, sustains appellants' position. (See, also, Milligan v. Miles City, 51 Mont. 374, 153 P. 276, L. R. A. 1916C, 395; 1 McQuillin on Municipal Corporations, 2d ed., secs. 390, 391; vol. 4, sec. 1887; 43 C. J. 421.) The rule is well stated in 7 Fletcher, Cyclopedia Corporations, sec. 4558, at p. 7887.

From these authorities and the expressions of this court in Feil v. Coeur d' Alene, 23 Idaho 32, 129 P. 643, 43 L. R. A., N. S., 1095, while such expressions therein are only dicta, since they merely forecast the situation in case of municipal ownership, we believe it clear that, since municipally owned utilities are not under the jurisdiction of the Public Utilities Commission (C. S., sec. 2371), actions may be instituted in the courts by any person interested and affected thereby to test the reasonableness of their rates. (Robbins v. Bangor Co., 100 Me. 496, 62 A. 136, 1 L. R. A., N. S., 963; Barnes Laundry v. Pittsburgh, 266 Pa. 24, 109 A. 535; Westerhoff v. Ephrata, 283 Pa. 71, 128 A. 656.)

Respondents further contend that the appellants are not...